Econintersect: The on-line purchases of discretionary consumer durable goods continues to be much weaker than broader measures of retail activity reported by government agencies. Whereas retail sales in general as measured and reported by the U.S. Census Bureau have recovered to pre-recession levels (if not adjusted for inflation and population growth), the CMI (Consumer Metrics Institute) contraction watch shows that recovery is less than 1/3 for the items that they are measuring.According to Rick Davis, CEO of CMI:
The above chart [not shown here] is clearly signaling that something is amiss with the consumer economy — something that neither the BEA nor the BLS has yet reported. Our data suggests that their aggregate measures of the economy fail to capture share changes among the different socio-economic, age, gender, racial or cultural demographics. In effect, this may not be a rising tide — but rather a selectively benevolent crane operator who is lifting favored boats back to sea.
Some external evidence of demographic divergences was observed within the February University of Michigan consumer sentiment data by Dave Rosenberg. Although the headline number of 75.1 beat expectations (and was the highest level since June), Dave noted that:
“all the gains in consumer confidence in the past month were concentrated in the high income segment ¯ soaring to 88.2 in February from 80.7, which is the best reading since December 2007. That is a sure sign of how the equity wealth effect has taken over, at least among the folks that own stocks. But sentiment among the lowest income group actually tumbled from 72.1 to 67.7, a three-month low, and that may reflect the unintended consequence of QE2, which was to send the prices of food and fuel sharply higher.”
Source: GEI Analysis